Facebook valued at up to $95B in IPO price range

NEW YORK — Facebook, the company that turned the Web social, has set a price range for an initial public offering of stock that values the company at up to $95 billion.

Facebook’s IPO would be the biggest ever for an Internet company. Facebook disclosed the price range of $28 to $35 per share in a regulatory filing Thursday.

At the high end, Facebook and its current shareholders could raise as much as $13.58 billion. That happens if the underwriters sell extra stock reserved for overallotments, which they will likely do given the excitement surrounding the IPO.

That’s much higher than the 2004 IPO for current record-holder Google Inc., which raised $1.9 billion including the overallotment. The IPO valued the company at $23 billion. Google is now worth about $200 billion.

Facebook Inc.’s IPO has been highly anticipated, not just because of how much money it will raise but because Facebook itself is so popular. The world’s largest online social network has more than 900 million users worldwide.

CEO Mark Zuckerberg, who turns 28 this month, has emerged as a wunderkind leader who’s led Facebook through unprecedented growth from its scrappy start as a hangout for Harvard students.

Facebook’s offering values the company at $76 billion to $95 billion, based on the expected number of Facebook shares following the IPO. That’s about 2.74 billion, according to Renaissance Capital, an IPO investment adviser.

Facebook’s next step is to go on an “IPO road show,” where executives talk to potential investors about why they should invest in the stock. On Thursday, Facebook posted a version of its road show online, with appearances from Zuckerberg; the vice president of product, Chris Cox; and other executives.

If all goes well, Facebook’s stock is expected to price on May 17 and make its public debut on May 18.

Zuckerberg will keep tight control over the company even after the IPO. He will control 57.3 percent of the company’s voting power, through stocks he owns or because other shareholders have promised to vote his way through shares that they own. This means he will have final say over the biggest decisions facing the company even after it goes public.

Zuckerberg will likely own about 31.5 percent of Facebook’s outstanding stock after the IPO. At the high end of the expected price range, this will make his holdings worth $17.6 billion. This would put him at around No. 33 of the Forbes lists of the world’s richest people, above the likes of Dell Inc. CEO Michael Dell and Microsoft Corp. CEO Steve Ballmer.

Facebook’s expected valuation will easily surpass well-known corporations such as Kraft Foods Inc. The amount it is trying to raise in the IPO would slot it among the world’s 25 largest IPOs, although as recently as November 2010, General Motors raised $15.8 billion when it shed majority control by the U.S. government.

Among the IPOs that rank higher than Facebook’s, according to Renaissance Capital, are Visa Inc.’s $17.9 billion IPO in March 2008, the largest for a U.S. company, and world-topper Agricultural Bank of China Ltd., which raised $19.3 billion in July 2010. These figures do not include extra shares issued to meet demand.

Facebook plans to list its stock on the Nasdaq under the symbol “FB.”

———

Online:

Facebook’s online road show:

http://facebook.retailroadshow.com/launch.html

More in Herald Business Journal

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Providence Hospital in Everett at sunset Monday night. Officials Providence St. Joseph Health Ascension Health reportedly are discussing a merger that would create a chain of hospitals, including Providence Regional Medical Center Everett, plus clinics and medical care centers in 26 states spanning both coasts. (Kevin Clark / The Daily Herald)
Merger would make Providence part of health care behemoth

Providence St. Joseph Health and Ascension Health are said to be talking. Swedish would also be affected.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Washington, Amazon sue company over seller training programs

Braintree is accused of using deceptive ads promising information on how to make money on Amazon.

Providence said to be in talks for merger with Ascension

The two Catholic health organizations have been exploring joining forces, sources say.

Lockheed-Martin dominates global arms sales, Boeing is 2nd

The combined sales of U.S.-based companies totaled $217 billion.

Most Read